ORGANISATIONAL BEHAVIOUR

MODULE-I

What Is Organizational Behavior

Organizational Behavior has included two terms in it. Therefore, these two terms should be detailed first before
diving into the title in question.

→ Organization: It is a group of people who are collected to work for a common goal with collective efforts.
Organization works through two concepts i.e. coordination and delegation among its group members.
Delegation is necessary to allocate group members with equal work according to their capability, and
coordination is required to achieve organizational goal with precision.
→ Behavior: It is a verbal or physical response shown by a person as a consequence of the impact of his/her
surroundings. Individual Behavior varies in accordance with their mental reactivity to particular circumstances
because of their deeply imbibed morals and value system.
→ Organizational Behavior: Organizational Behavior is the observation of individual and/or group Behavior
in response to the other individuals or group as a whole. It studies Behavior of people or group to know their
attitude towards particular circumstances.

INTRODUCTION
All organizations, be the business,
educational or government, are
social systems. They
are run by people. The functioning of
an organization depend upon how
people work or behave
in the organization. Human
behaviour in organizations is highly
unpredictable. It is unpredictable
because it arises from people’s
deep-seated needs and value
systems. However, it can be partially
understood in terms of the
framework of behavioral science,
management and other disciplines.
There is no idealistic solution to
organizational problems. All that can
be done is to increase our
understanding and skills so that
human relations at work can be
enhanced.
INTRODUCTION
All organizations, be the business,
educational or government, are
social systems. They
are run by people. The functioning of
an organization depend upon how
people work or behave
in the organization. Human
behaviour in organizations is highly
unpredictable. It is unpredictable
because it arises from people’s
deep-seated needs and value
systems. However, it can be partially
understood in terms of the
framework of behavioral science,
management and other disciplines.
There is no idealistic solution to
organizational problems. All that can
be done is to increase our
understanding and skills so that
human relations at work can be
enhanced.
INTRODUCTION
All organizations, be the business,
educational or government, are
social systems. They
are run by people. The functioning of
an organization depend upon how
people work or behave
in the organization. Human
behaviour in organizations is highly
unpredictable. It is unpredictable
because it arises from people’s
deep-seated needs and value
systems. However, it can be partially
understood in terms of the
framework of behavioral science,
management and other disciplines.
There is no idealistic solution to
organizational problems. All that can
be done is to increase our
understanding and skills so that
human relations at work can be
enhanced.
NATURE OF ORGANISATIONAL BEHAVIOUR
Organisational Behaviour (OB) helps firms achieve effectiveness in their activities.
Organisations, as stated earlier, comprise people and OB helps in utilising these
resources for achieving organisational effectiveness. People generally possess physical
strength, skills of some kind, executive skills and organising abilities. OB helps harness
these qualities and use them for achieving organisational goals.

Definition and Meaning of OB

Definitions on OB are many. However, three features need to be emphasised in any
definition:
OB is the study of human behavior
The study is about behaviour in organizations
Knowledge about human behaviour would be useful in improving an organisation’s
effectiveness.
Combining the above three features, OB may be understood to be the study of human
behaviour in organisational settings, of the interface between human behaviour and the
organisation and of the organisation itself. Knowledge gained from such a study is useful
in improving organisational effectiveness.
The following definitions are appropriate: OB refers to the behaviour of individuals and
groups within organisations and the interaction between organisational members and
their external environments. OB is a field of study that investigates the impact that
individuals, groups and structure have on behaviour within organisations for the purpose
of applying such knowledge towards improving an organisation’s effectiveness.
To sum up, OB obviously comprises individual behaviour, group behaviour and of the organisation itself.
Understanding of the subject is complete when all the three are studied carefully. The study of individual
behaviour alone is incomplete because the actions of the employee influence and are influenced by the
organisation where he or she works. Again, studying only organisations without learning about the people
amounts to looking at only a part of the picture.

SCOPE OF ORGANISATIONAL BEHAVIOUR

Organisational behaviour, as mentioned earlier, is the study of human behaviour within organisations. The
subject encompasses the study of individual behaviour, interpersonal behaviour, and of the organisations
themselves. Intrapersonal behaviour covers such aspects as personality, attitude, perception, learning, opinion,
motivation, job satisfaction, and stress management. Interpersonal behaviour includes group dynamics, team
dynamics, intergroup conflict, leadership, communication, transaction analysis, and the like. About
organisations, the study covers such aspects as their formation, structures, effectiveness and formal and informal
organisations. These three levels of analysis are not necessarily mutually exclusive. The field of organisational
behaviour embraces them as being complementary. In the past, these three levels of analysis were pursued with
little co-ordination by behavioural scientists. Now, however, a major contribution of those interested in OB is
the attempt to integrate these three levels of analysis, although this will require much effort. The individual
focus is no more important or valuable to the manager within an organisation than is the group or formal
organisational focus. There is no need to choose one level of analysis and exclude the others. Managers in
business, health care, education, government, and religious organisations all have problems in common that
require an interdisciplinary approach. This can be provided by OB because it emphasises on all these levels of
analysis — the individual, the group, and the formal organisation.
1) People: This element is the soul of the Organization because people work to achieve the target of
Organization and Organization works to fulfill the needs of individual or group of individuals. The word
‘people’ can be anyone who is working inside the Organization, like employees or any external person like
supplier, customer, auditor, or any government official.
2) Structure: It is the body of the Organization which is to be taken care of to bring coordination between
different levels of Organization, because Organization does not work aloof and is dependent on people which
again work on the concept of division of labor. So, there is always a hierarchy in Organization which if not
properly dealt with can mess the system because of nil scrutiny and flow of control.
3) Technology: Organizations work on technologies to help people in efficiently doing their work. Same
technology does not apply to each Organization but different Organizations demand different technologies for
their different line of businesses e.g bank needs mediating technology which connects customers and bankers,
Manufacturing companies need long linked technology because of their assembly line process, and hospitals
work on intensive technology because of their responsibility to provide specialized services in terms of doctors
and medical equipments.
4) Environment: Organizations are influenced by the environment in which they work, at a substantial level.
Environment is important to Organizations because of the following factors:
# Supply and demand comes from this environment.

# Human resource, competitors, government agencies, unions, and political parties comes from environment in
which Organization is surviving.

# The Organizations have to follow rules and regulations fostered by this environment.

Importance of Organizational Behavior:

1. It builds better relationship by achieving people’s, organizational, and social objectives.
2. It covers a wide array of human resource like behavior, training and development, change management,
leadership, teams etc.
3. It brings coordination which is the essence of management.
4. It improves goodwill of the organization.
5. It helps to achieve objectives quickly.
6. It makes optimum utilization of resources.
7. It facilitates motivation.
8. It leads to higher efficiency.
9. It improves relations in the organization.
10. It is multidisciplinary, in the sense that applies different techniques, methods, and theories to evaluate the
performances.

Relationship Between Organizational Behavior & Individual

Organizational behavior refers to the way that people, either as individuals or in groups, behave within the
context of an organization. Psychological theories, meanwhile, seek to explain the reasons people behave as
they do. The intersection of organizational behavior and psychological theory provides insight into why people
act as they do in the context of work. Such insight can help leaders create environments conducive to better
performance. Specific psychological theories have different relationships with organizational behaviors.
Motivation
Motivation in employees allows them to sustain effort in a particular direction for some period of time.
Naturally, management wants motivated employees. But, motivated by what and to what end? Psychological
theory often attempts to explain motivation through evaluating people's needs. In Maslows' theory, for instance,
needs are ordered from those of basic survival to metaphysical fulfillment. The lowest unmet need, according to
theory, is the one driving an individual's behavior. Meshing the motivations of employees with a company's
needs can help leaders achieve goals.
Reciprocity
Social exchange theory refers to cooperative, reciprocal behavior that emerges when a person is the recipient of
some benefit. A relationship begins when a benefactor bestows something upon another and the recipient, in
turn, returns the favor by becoming the benefactor. As the exchange of benefits continues, the relationship
grows, built on a sense of mutual obligation and an implied contract. In terms of organizational behavior, social
exchange theories predict that those in leadership roles can garner employee backing for company agendas if
those employees are treated favorably. If an organization breaks its contract by not keeping benefits up,
employees may feel released from their contract with the employer at the cost of loyalty and effort on the
company's behalf.
Positivity
The advent of the 21st century saw the development of a new way of approaching organizational behavior.
Instead of trying to eliminate the negative, current psychological theory looks at accentuating the positive. This
new study falls under the positive psychology movement. Phrases such as "positive organizational behavior" or
"positive organizational psychology" are used when positive psychology is applied to organizational behavior.
Applied that way, it looks at the positive psychological capital of an organization -- in other words, this new
theoretical approach emphasizes what's right and figures out where it comes from so an organization can
propagate more of the same. Confidence, hope, resiliency and optimism -- these are the important positive
psychological traits that lay behind constructive activity and organizational behavior. This capital can belong to
individuals, groups, leaders and to the organization itself.
Group Belonging
Social identity theory refers to the identity a person feels as a member of a group. A sense of group belonging
can be a powerful force in an organization because people tend to favor others who are of their group as an
extension of self. This can be damaging if the social identity is, for instance, based on race or gender. On the
other hand, social identity can create a sense of camaraderie among members of a work team and give it a
competitive edge.
EVOLUTION OF OB
Five stages are distinct in the evolution of OB: Industrial Revolution, Scientific Management,
Human Relations Movement, Hawthorne Studies and OB itself.
Experts of human behaviour have tried to chronicle the growth of the subject only from the
beginning of the 19th century. The early part of the 19th century is significant because it was
during this period that the Industrial Revolution took place that resulted in the total transformation
of the then industrial environment.
Industrial Revolution: Industrial Revolution brought about materialism, discipline,
monotony, boredom, job displacement, impersonality, work interdependence, and related
behavioural phenomena. Nevertheless, the Industrial Revolution was responsible for planting
the seed for potential improvement. Industry created surplus of goods and knowledge that
eventually gave workers increased wages, shorter hours, and more work satisfaction. In this
new industrial environment Robert Owen, a young Welsh factory owner, about the year 1800,
was one of the first to emphasise the human needs of employees. He refused to employ young
children. He taught his workers cleanliness and temperance and improved their working
conditions. Owen could demonstrate in his own factory that it paid to devote as much attention
to ‘vital machines’ as to ‘inanimate machines’. His methods entitled him to be called the ‘father
of personnel management’. This could hardly be called modern organisational behaviour, but
a beginning in that direction was, however made.
In 1835, Andrew Ure published his The Philosophy of Manufactures, in which, he included
the human factor as one of the factors of production, besides the mechanical and commercial
parts. Believing in the importance of the human factor, Ure provided workers with hot tea,
medical treatment, and sickness payments.
Nearer home, around this time J.N. Tata took a special interest in the welfare of his workers.
He installed the first humidifiers and fire sprinklers in his factories. In 1886, he instituted a
pension fund, and in 1895, began to pay accident compensation. He was decades ahead of his
time and miles ahead of his competitors. The Empress Mills experiments showed that not only
profits but people mattered to him.
The ideas of Owen, Ure and Tata were accepted slowly or not at all, and they often
deteriorated into a paternalistic, do-good-approach than a genuine recognition of the importance
of people at work.
Scientific Management: The very mention of scientific management brings Taylor to our
memory. He is appropriately called the ‘father of scientific management’ as he converted broad
generalisations into practical tools. He was also responsible for awakening interest in workers
in the 1900s. Taylor advocated the selection of right people for right jobs, training them
adequately, placing them in jobs for which they were best suited, and remunerating them
handsomely. To be sure, Taylor’s goal was technical efficiency, but at least management was
awakened to the importance of human resources, which was hitherto neglected.
Taylor published his major work Principles of Scientific Management in 1911. During that
decade, interest in human conditions at work was accelerated by World War I.
Taylor’s ideas were criticised — particularly, his belief in rationalising everything and holding
the assumption that human behaviour is based on ‘rabble hypothesis’.
But Taylor’s ideas are practised even today.
introduced during the scientific management era in their efforts to become even more efficient.
It is digital Taylorism now.
The scientists who were closely influenced by Taylor were the industrial psychologists Frank
and Lillian Gilbreth. This husband-and-wife team pioneered time-and-motion study, a type of
applied research designed to classify and streamline the individual movements needed to perform
jobs with the intent of finding “the one best way” to perform them. Although this approach
appears to be highly mechanical and dehumanising, Gilbreths had great concern for human
beings.
Scientific management was criticised by employees and theorists for its overemphasis on
task accomplishment and monetary incentives at the cost of respect for human beings. A new
approach that treated workers as human beings was desired.
The Human Relations Movement: Failure of Scientific Management gave birth to the human
relations movement which is characterised by heavy emphasis on employee co-operation and
morale. Under this, people were to be treated as human beings and not as machines, listening
to their needs and problems and involving them in decision making in matters relating to
working conditions. There are varied and complex reasons for this human relations position.
Historically, three of the most important contributing factors would be the Great Depression,
the labour movement, the results of the now famous Hawthorne Studies.
The stock exchange crash of 1929 in America marked the beginning of the Great Depression.
The consequences of the Depression were widespread unemployment, decline of purchasing
power, collapse of markets, and lowering of the standard of living of people. This phenomenon
was worldwide and not confined to America alone.
One positive outcome of the Depression was that management began to realise that
production alone could not be its major function. Marketing, finance, and personnel were also
required in order for a business to survive and grow. The Depression’s aftermath of unemployment
and insecurity bought to the surface, human problems that managers were now forced to
recognise and cope with. Personnel departments were either created or given more emphasis,
and most managers now began to develop a new, awakened view of the human aspects of
work. Human relations took an increased significance as an indirect, and in some cases, direct
result of the Depression.
Mere creation or strengthening of personnel departments did not improve the plight of
workers. Production still preceded people in order of importance in organisations. Decent
hours of work, fair wages, and adequate working conditions were sacrificed for more production.
There were people like Taylor, Ford, and Sloan who sincerely believed in giving the labour its
due share. Such noble hearted souls were few and far between. In general, exploitation of
labour continued.
Labour Movement: Continued exploitation made workers realise that their protection lay
in their own hands. They formed strong unions and this had the desired effect on management.
Management began to place primary emphasis on employee relations, and secondary attention
was given to wages, hours of work, and conditions of employment.
Unfortunately, the human relations role also often came about for wrong reasons. In too
many cases, it was forced on managers by labour, threatening them with consequences of noncompliance.
Ideally, it would have been better, had, human relations developed because of
intrinsic motivation of practising managers, to better understand and provide for the welfare of
their employees.
Hawthorne Studies: Although the Depression and the labour movement were at least,
important indirect causes of the practice of human relations, the Hawthorne studies dominate
the academic discussion on historical development. The studies gave academic status to the
study of organisational behaviour.
The studies were carried out at the Western Electric Company’s Hawthorne works in Cicero,
a suburb of Chicago, and are closely linked with the name of Elton Mayo. As Professor of
Industrial Research at the Harvard School of Business Administration, Mayo was the person,
most responsible for conducting the studies and publicising their significance. Naturally, he is
called the ‘father of human relations movement’.

Theoretical frameworks of organizational behaviour

Three main theoretical frameworks of organizational behaviour include the cognitive, behaviouristic and social
learning frameworks. These form the basis of an organizational behaviour model.
The cognitive approach is based on the expectancy, demand and incentive concepts. Edward Tolman has
developed this approach. Behaviouristic framework concentrates on observable behaviours. Ivan Pavlov and
John B.Watson evolved the theoretical model of the behaviouristic approach. These theorists described human
behaviour on the basis of the connection between stimulus and response.
The social learning approach integrates the thoughts and principles of both the cognitive and behaviouristic
frameworks. This approach denotes that behaviour is explained as a constant reciprocal interaction between
cognitive, behavioural and environmental determinants. Renowned theorists, Allbert Bandura, Julian Rotter,
Salancik and Pfeffer are the main advocates this framework.
In management practices, there are five organisational behaviour models that include Autocratic, Custodial,
Supportive, Collegial and System. Autocratic model is power with a managerial orientation of authority. This
model evolved during the industrial revolution, in the 1800's and 1900's. This model undertakes that employees
have to be directed and motivated to do the work. In this model, management does the thinking, employees
follow orders and depend on the manager. Employees are under controlled. Characteristically, employees
receive lowest pay for minimum expected performance. Employees may have lower skills. Often, employees
work in the authority model because they have to provide maintenance for themselves and their families.
Main drawback is that it leads to micro management. With micro management, managers control daily
operations of employees. Managers control time and processes, they put their needs above those of employees,
they insist on complicated approval processes for even the smallest things and closely monitor all results.
Autocratic model and micromanagement results in low employee morale, poor decision-making and high
turnover. This model can be beneficial in crisis situations, or with short-term employees (Newstrom).
Custodial is economic resources with a managerial orientation of money. In the decade of 1800's, employers
understood that personnel can give better performance if their basic needs are more satisfied. In this model,
employees emphasize on economic rewards. They may be reasonable content, but may not be highly motivated
just inactively supportive. Organization that embrace the custodial approach have a lower staff throughput.
However, employees do not give their best performance. The custodial model is a good foundation for
organizations to grow to the next approach.
Supportive model is leadership with the managerial orientation of support. Studies were conducted for this
model in the decades of done 1920's and 1930's. Personnel are more interested because their status and
recognition needs are better met as compared to other models. A supportive manager helps employees solve
problems and complete their work.
Collegial model is corporation with the managerial orientation of team work. In this model, organisation
develops a feeling of partnership with employees. The environment is open and people participate. The collegial
model is beneficial for creative work such as marketing or communications or in thinking environments.
System Model: This model is currently developed in which people want more than money, job security and
cooperative teams. The system model focuses on identifying developing and managing the strengths within
employees.

Limitations of Organizational Behavior:

1. Behavioral bias: It further causes dependence, dis-contentment, indiscipline, and irresponsibility.
2. Law of diminishing returns: It says that beyond a certain point, there is a decline in output even after
each additional good or positive factor.
3. Unethical practices and manipulation of people: Knowledge of motivation and communication
acquired can be used to exploit subordinates in an Organization by the manipulative managers.